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Facts
The assessee's appeal was preferred against an order dated 15/03/2024 by the NFAC, Delhi, for Assessment Year 2015-16. The NFAC issued a notice on 12/03/2024 asking for details by 18/03/2024, but passed the appellate order prematurely on 15/03/2024, before the due date.
Held
The Tribunal held that passing an appellate order before the scheduled hearing date violates the principles of natural justice. Such an order is considered void-ab-initio. Therefore, the issue was restored to the CIT(A)/NFAC for a fresh decision.
Key Issues
Whether the NFAC violated principles of natural justice by passing an order before the specified hearing date? Whether the assessee, a registered trust, was wrongly denied exemptions under sections 11 & 12 of the IT Act, 1961?
Sections Cited
250, 154, 11, 12, 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “K” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI RAHUL CHAUDHARY, HON’BLE
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assessee is preferred against the order dt. 15/03/2024 by NFAC, Delhi, pertaining to Assessment Year 2015-16. 2. The grievance of the assessee reads as under:- “1. The Hon. CIT(A) erred in passing the appeal order u/s 250 on 15.03.2024, when the last date of appeal hearing was on 18.03.2024 and therefore by passing the appeal order before the date of appeal hearing, the Hon. CIT(A) has denied the appellant natural justice and for this reason the order passed u/s 250 on 15.03.2024 is bad-in-law, void-ab-initio and is required to be quashed.
The Hon. CIT(A) erred in upholding the addition of Rs. 19,24,720/-, without appreciating that being a trust registered u/s 12AA of the IT Act 1961, the income of the appellant was required to be computed after granting exemptions/deductions provided under provisions of section 11 & 12 of the I. T. Act 1961 and as the original return of income for A.Y. 2015-16 was filed within the time limit provided by section 139(1) of the I. T. Act, 1961, there is no cause to deny the benefit of said exemptions provided by the I. T. Act, 1961. I.T.A. No. 2375/Mum/2024 2
The appellant craves leave to add, alter, amend, delete and/or vary any of the above grounds of appeal at any time before the decision of the appeal.”
The peculiar facts of the case in hand are that the NFAC, Delhi, issued the following notice:- 3
A close perusal of the aforementioned notice shows that it was issued on 12/03/2024 asking the assessee to furnish the details on or before 18/03/2024. Surprisingly, without waiting for the due date, the NFAC passed the appellate order on 15/03/2024, making the issuance and service of the aforementioned notice futile.
In our considered opinion, the NFAC should restrain from passing such orders which are in gross violation of principles of natural justice. Once a notice of hearing is given, it becomes incumbent upon the issuing authority to follow the Rule of law and wait for the response. Passing the order prior to the date, is gross injustice to the assessee. Therefore, in the interest of justice, we restore the issue to the file of the ld. CIT(A)/NFAC with a direction to decide the appeal afresh after affording reasonable and adequate opportunity of being heard to the assessee.
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 29th July, 2024 at Mumbai. (RAHUL CHAUDHARY) ACCOUNTANT MEMBER Mumbai, Dated 29/07/2024 *SC SrPs *SC SrPs *SC SrPs *SC SrPs 4
आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : अपीलाथ" / The Appellant
""थ" / The Respondent 2. संबंिधत आयकर आयु" / Concerned Pr. CIT 3. आयकर आयु" अपील
( ) / The CIT(A)- िवभागीय "ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 5. गाड" फाई/ Guard file. 6. आदेशानुसार/ BY ORDER,